The
monumental shift to true airline retailing is happening right now. Airlines
have made significant investments to differentiate their products in the market
to meet traveler expectations.
However, this investment is not enough if the
flight shopper is unable to recognize the differentiated travel experiences throughout
their shopping journey. Commoditized shopping experiences focused solely on
price and schedule continue to have negative effects on conversion rates,
branded fare upsell and ancillary attachment rates.
Flight
shoppers’ expectations continue to evolve as they demand a better, more customized
shopping experience. They want to understand their options through visually
compelling offers that allow them to personalize their travel experience to
best meet their needs. Plus, by meeting these consumer expectations and demands,
an airline can also immediately improve its financial performance.
An
important reason to transform to true airline retailing now
In its most recent Board of Governors Report from the Annual General Meeting held
in June 2022, IATA discussed continued progress toward true airline retailing
and what that looks like for the entire airline industry.
Travelers want to see
beyond the fare and schedule. They want to understand value and have choice and
control over their flight experience. A price is not just a price, and it is no
longer the most crucial piece of information to a flight shopper. Consumer research has shown a clear demand for more
visuals, more transparency, and more choices.
IATA’s findings were further
validated in McKinsey’s “Six secrets of profitable airlines” article, where they
reinforced that customers no longer shop for flights based solely on price and
schedule.
Attributes like Wi-Fi availability, in-flight entertainment, seat
details and maps, on-time performance and even environmental impact affect a
customer’s decision to purchase a ticket. Richer information and content are
being shown to customers, helping them feel confident and satisfied about their
purchase.
Alongside both IATA and McKinsey, ATPCO’s 2022 Annual Flight Shopping Survey further validated the idea that flight shoppers
expect more than just a price to make a purchase decision.
The results were
obvious - 80% of flight shoppers
are more likely to book a flight with targeted visuals that effectively
merchandise flight options over commoditized displays focused solely on price
and schedule. They want visuals of seats, entertainment, sustainability
efforts and more. And while a visual experience is clearly in demand for
flight shoppers, it is also vital for airlines looking to realize the value of
their product investments.
What does airline
retailing transformation look like?
Customers
want to visualize what they are buying before they buy it - this is what true
airline retailing looks like. Showing rather than telling a flight shopper what
their flight experience will be is the leading concept behind this
transformation.
Customers are looking for choice and control and need to know
what options are available to them. They want to tailor their experience to fit
their unique needs. This type of selling creates a more cohesive, in-control
feeling for the customer and unlocks value creation by putting the customer
experience first.
An
essential component of this movement to true retailing is merchandising.
Merchandising is “how” airlines are presenting these offers to customers in
ways that resonate with what they want. It is the first step in differentiating
and customizing the value of their unique offers.
Up to this
point, many airlines have focused on offering more products to stand out among
competitors and differentiate themselves, but there has been little emphasis on
how they are presenting (merchandising) all these new options - or what their
customers actually want and need to see. Ultimately, customers need to visually
understand the differences between various products being offered.
The power
behind modern merchandising
Enabling
modern airline merchandising through visually compelling imagery improves consumer
satisfaction by meeting and exceeding their shopping experience demands.
Whether
it is showcasing an airline’s branded fares, premium cabin experiences or
ancillary services, these elements are the key to unlocking the power behind
modern merchandising. When integrating
modern merchandising into a shopping experience using visually
compelling imagery, airlines can increase conversions and revenue all while
creating the customer experience their consumers are craving.